The used car market is projected to grow by USD 857.1 billion from 2024-2028, driven by rising competition and new car models, with AI influencing market trends - Technavio

NEW YORK, Sept. 6, 2024 /PRNewswire/ -- Report on how AI is redefining market landscape- The global used car market size is estimated to grow by USD 857.1 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of almost 7.56%  during the forecast period. Increasing number of new models of cars launched due to high competition is driving market growth, with a trend towards growing demand for car subscription services. However, increasing demand for car-sharing services  poses a challenge. Key market players include Alibaba Group Holding Ltd., Asbury Automotive Group Inc., AutoNation Inc., Autotrader.com Inc., Berman Auto Group, CarGurus Inc., CarMax Inc., Cars24 Services Pvt. Ltd., DriveTime Automotive Group Inc., eBay Inc., Group 1 Automotive Inc., Hendrick Automotive Group, Hertz Global Holdings Inc., Lithia Motors Inc., Mahindra and Mahindra Ltd., Penske Corp., Scout24 AG, Sonic Automotive Inc., Toyota Motor Corp., and TrueCar Inc..

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Car subscription services offer consumers an alternative to owning or leasing a vehicle with an all-inclusive monthly fee, including roadside assistance, insurance, and maintenance. These services enable users to change cars with short notice, providing flexibility to switch between sedans, SUVs, or sports cars. Some providers focus on luxury cars, catering to consumers who cannot afford their high cost of ownership or leasing. Volvo, for instance, offers its Care by Volvo service. Used luxury cars are increasingly in demand for these subscriptions, creating growth opportunities for players in the global used car market. This trend is expected to drive market expansion during the forecast period. 

The used car market is witnessing significant trends as consumers prioritize fuel-efficient and eco-friendly vehicles to reduce their carbon footprint. Aging vehicle fleets are being replaced with modern cars, offering advanced safety features, durability, and reliability. Online platforms provide transparency in the buying process, allowing diverse consumers to access inventory, prices, and vehicle histories from the comfort of their homes. Regulatory changes and environmental concerns are driving the demand for eco-friendly vehicles, such as hybrid and electric cars. Trusted e-commerce platforms offer mobile apps, vehicle history reports, and virtual vehicle inspections for added convenience. As fuel prices fluctuate, the importance of fuel efficiency and adaptive cruise control, lane-keeping assistance, and infotainment systems continues to grow. The future outlook for the used car market is promising, with regulatory incentives, rebates, and fast-charging infrastructure supporting the shift towards modern, eco-friendly vehicles. 

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•         The used car market is experiencing shifts due to changing consumer preferences and economic factors. In some markets, such as China, the rise of car-sharing services has led to a decline in car ownership as consumers opt for more cost-effective alternatives to personal mobility. This trend is driven by the high percentage of time a private car spends parked and the cost savings from shared maintenance and usage. In China, car-sharing services have a use rate of up to 60%, compared to the estimated 93% of time a private car spends unused. This optimum use of cars, combined with lower taxi rates in China, creates a strong demand for car-sharing services, particularly during peak hours and extreme weather conditions. In the global taxi market, a gap of 100,000-200,000 units exists due to rising incomes and stringent regulations. This gap is being filled by the growth of car-sharing services, with major contributions from both domestic and foreign manufacturers and municipal governments. Similarly, in Brazil, car-sharing operators like Fleety, Zazcar, and Joycar offer cheaper rates than taxis or car rentals, making them an attractive option for consumers. This increasing popularity of car-sharing services is expected to decrease the demand for used cars, contributing to the growth of the global used car market.

•         The used car market faces various challenges in the current business environment. Gasoline and diesel vehicles are giving way to electric and hybrid alternatives, affecting sales volume. Traditional offline dealerships compete with online sales channels, including auto marketplaces like Ebay Inc. OEMs, banks, NBFCs, and insurance companies play crucial roles, impacting affordability for buyers. Luxury vehicles and used car shipment present unique challenges due to high overhead costs. Quality and reliability are key concerns for customers, especially for used passenger cars. Online players offer virtual reality tools to enhance buyer position and symmetry of information. Age groups and buyer preferences vary, requiring dealership networks to cater to retail models and independent dealers. Brand loyalty and consumer expectations influence sales, while budget constraints impact price-sensitive buyers. Franchise dealers and OEM involvement in used car sales are growing trends. The organized segment is expanding, but challenges remain in maintaining consumer trust and ensuring transparency. Overall, the used car market requires continuous innovation and adaptation to meet the evolving needs of customers.

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This used car market report extensively covers market segmentation by  

1. Vehicle Type
• 1.1 Compact car
• 1.2 SUV
• 1.3 Mid size
2. Channel 
• 2.1 Organized
• 2.2 Unorganized
3. Geography 
• 3.1 APAC
• 3.2 North America
• 3.3 Europe
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Compact car-  The compact car segment is a significant contributor to the global used car market, with APAC and Europe leading the charge. This segment's growth is driven by the increasing specifications of compact cars and the rising need for personal mobility. In regions with heavy traffic congestion, compact cars are a popular choice due to their ease of use and lower emissions. Europe's used compact car market is bolstered by models like the Fiat Panda and Volkswagen Golf. In India, the organized sector's improvement in used car quality and the preference for fuel-efficient vehicles have fueled demand for compact cars, with Maruti Suzuki's Alto and Wagon R being top choices. However, the Indian government's plan to reduce taxes on hybrid and electric cars may impact used compact car sales negatively. Despite this challenge, the compact car segment is expected to expand, contributing to the growth of the global used car market.

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The used car market is a thriving industry that caters to the diverse needs of consumers seeking personal transportation solutions. Modern used vehicles offer safety features like adaptive cruise control and lane-keeping assistance, ensuring a secure driving experience. Durability and reliability are key selling points, making used cars an attractive alternative to new vehicles. Transparency and trust are essential in the used car buying process. Online platforms and e-commerce sites provide consumers with access to extensive vehicle inventories, prices, and vehicle histories, enabling informed decisions. Industry applications of advanced imaging technologies and mobile apps offer enhanced shopping experiences. Environmental concerns have influenced the used car market, with consumers increasingly preferring fuel-efficient and eco-friendly options. Transparent vehicle history reports are crucial for ensuring the reliability and trustworthiness of used vehicles. The industry continues to evolve, with ongoing advancements in infotainment systems and industry applications.

The used car market is a diverse consumer base seeking personal transportation solutions with a focus on fuel-efficient and eco-friendly options. Aging vehicle fleets and regulatory changes drive the demand for modern, reliable used vehicles. Safety features, durability, and advanced technologies such as adaptive cruise control, lane-keeping assistance, and infotainment systems are increasingly important. Online platforms offer transparency, convenience, and competitive pricing, with e-commerce platforms and mobile apps enabling virtual vehicle inspections and transactions. Environmental concerns, including greenhouse gases and air pollution, influence the shift towards eco-friendly vehicles like hybrids and electric cars. Accessible financing options, including low-interest rates and flexible packages, cater to various consumer needs and sales channels. The future outlook of the used car market is promising, with continued growth and innovation in response to changing consumer preferences and market dynamics.

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Vehicle Type
• Compact Car
• SUV
• Mid Size
• Channel
• Organized
• Unorganized
• Geography
• APAC
• North America
• Europe
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio